Inter‐Organizational Cooperation Challenging Hierarchical Accountability: The Dominated Actors in a Municipal Joint Venture

• Author: Mikael Cäker,Kari Nyland
• Date: 01 February 2017
• DOI: http://doi.org/10.1111/faam.12115
• Published date: 01 February 2017

Financial Accountability & Management, 33(1), February 2017, 0267-4424

Inter-Organizational Cooperation

Challenging Hierarchical

Accountability: The Dominated

Actors in a Municipal Joint Venture

MIKAEL C¨

AKER AND KARI NYLAND∗

Abstract: New public management offers a number of solutions to the kinds of

problems that public sector organizations experience. In taking an accountability

perspective, this paper elaborates on how two of these – strict responsibility for

performance, and inter-organizational cooperation – may conflict. The setting for

this study is a joint venture with a dominant municipality and six dominated munic-

ipalities as owners. The article examines how horizontal accountability processes

may influence the dominated owners’ hierarchical accountability. The ability to

account hierarchically for the quality of service within budgetary parameters is

problematized, when dominated owners may dismantle their ability to demand

horizontal accountability.

Keywords: accountability, inter-organizational relations, joint ventures, dominated

actors, new public management

INTRODUCTION

The search for greater modernization and efficiency in the public sector has

motivated the theory and policies of new public management (NPM). A major

feature of NPM is the ‘copying’ of private sector organizational solutions for use

with public sector organizational problems (Hood, 1995). A key feature of NPM

is decentralization accompanied by hierarchical accountability for performance.

Decentralization in the NPM era also sends a powerful message about strict

∗The authors are respectively from Handelsh¨

ogskolan vid G¨

oteborgs universitet, Sweden and

Trondheim Business School, Norway; and Trondheim Business School, Norway. They are

grateful for the comments provided at the conference Nordisk F¨

oretagsekonomisk F¨

orening

in Reykjavik 2013.

Address for correspondence: Mikael C¨

aker, F¨

oretagsekonomi, Handelsh¨

ogskolan vid

G¨

oteborgs universitet, Box 100, 40530 Gothenburg, Sweden.

e-mail: Mikael.caker@handels.gu.se

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JVS CHALLENGING HIERARCHICAL ACCOUNTABILITY 103

responsibility for measurable outcomes (Hood, 1995), where ‘All aspects of

results and their antecedents in public organizations are under intense public

scrutiny’ (Lapsley, 2008, p. 81).

In recent years, the use of different forms for inter-organizational cooperation

has been incorporated into NPM (Broadbent and Laughlin, 2003; Ryan and

Walsh, 2004; C¨

aker and Siverbo, 2011). Barretta and Busco (2011, p.213) claim:

The development of new cooperation agreements and innovative forms of organizing

within the public sector have been portrayed as possible ways of increasing performance

through more efficient use of resources, greater competitiveness, and improved

customer service (see also Hodges, 2012).

Small municipalities in particular are encouraged to cooperate with others

as they confront organizational challenges. Many municipal services require

substantial investments in facilities and knowledge, and inter-organizational

cooperation is seen as a way to share the burden of such investments (C¨

aker

and Siverbo, 2011).

Inter-organizational cooperation is related to intra-organizational control.

For example, Ryan and Walsh (2004) claim that hierarchical accountability

structures obstruct cooperation. This claim is consistent with the conclusions in

private sector research on how hierarchical control accountability influences

inter-organizational cooperation (Chenhall, 2008; C¨

aker, 2008; H˚

akansson

and Lind, 2004). However, research on how inter-organizational cooperation

influences internal control systems in the public sector is scarce (Lacey et al.,

2012; Shaoul et al., 2012).

From the private sector, for example, Mouritsen et al. (2001) show how

cooperation can reshape internal processes, while C¨

aker (2007) shows how

close customer relations create pressure for changing accountabilities in the

organization. Lacey et al. (2012) studied situations in which tasks in the public

sector depend on the interaction between organizations, and investigated how

performance measurements are affected. They argue that cooperation may limit

a public sector organization’s ability to demonstrate their performance. Shaoul

et al. (2012, p. 218) claim that cooperative arrangements ‘ .. . present problems

for public sector accountability because the public sector remains responsible

for services it does not deliver.’ Wilkins (2002) claims that different units have

long shared the responsibility for many public sector tasks, but appropriate

accountability structures have not been developed.

Even though inter-organizational cooperation and the horizontal accountabil-

ity processes that follow from this cooperation are a widespread phenomenon

today, hierarchical accountability is deeply rooted in contemporary public

organizations. Currently, we lack knowledge on how horizontal and hierarchical

accountability processes influence each other. To further our understanding

of the potential clash between two streams of the NPM message – strict

responsibility for performance, and inter-organizational cooperation – in this

paper we examine how horizontal accountability processes in the public sector

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2017 John Wiley & Sons Ltd